Million-dollar profit: Why Norco is still staying strong

Thu, Nov 9th, 2017

NORCO has reported a net profit of more than $1.1 million for the 2016/17 financial year.Norco Co-operative Limited Chairman Greg McNamara said he was pleased to announce the "solid set of financial figures" ahead of the Annual General Meeting to be held on November 15.

He said a good quality product, strong long-term relationships and growing consumer support were amongst the driving factors behind the solid results.

He said: "We have finished the 2016/17 financial year with an EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) of $8.859 million and a net profit of $1.122 million. This is after having been able to retain our total average farm gate price for our northern region supply as well as maintain the previously communicated position for our southern region milk supply.

"We are absolutely focused on consistently demonstrating that a farmer owned co-operative model with solid strategy, direction, management and performance can continue to prosper.

"Our diversified business model, geographical positioning, quality of product and strong long-term relationships have again been significant drivers in achieving these financial results. Our unique proposition in the market place as a true co-operative owned by Australian farmers continues to resonate with a growing consumer base.

"The board and management team are closely aligned on growing our geographic footprint beyond our traditional areas in the Norco Foods business. This strategy will have far reaching benefits, including creating efficiencies in our manufacturing facilities and opportunities for our members to grow their milk supply with stable milk prices. The profitability of our rural retail / agri business unit also plays a key role in our diversified business model, helping to safeguard both overall business profitability and member profitability."

He identified the highlights for the company during the financial year:

Record total sales of $555.6 million, up 2.2 per cent on the previous year

Record member milk supply volume of 221.8 million litres

Record Total Average Member Return (TAMR) of 58.18 cents per litre, up from 58.06 cents per litre on the previous year (TAMR consists of milk pay, dividends and Suppliers' Patronage Scheme rewards)

Norco branded milk sales increased by 34.6 per cent over the previous year.

Mr McNamara also acknowledged Norco's former Chief Executive Officer, Brett Kelly, who resigned on September 29.

He said Mr Kelly played a pivotal role in Norco achieving the excellent results as well as the company's continued growth.

At the AGM, members will be asked to approve a 6 per cent dividend based on the profit result.

Directors for the northern and central regions, Heath Hoffman and Greg McNamara were expected to be re-elected.

Norco's new Chief Executive Officer Ben White will be introduced to members at the meeting.